The President of the Independent Authority for Fiscal Responsibility (AIReF), Cristina Herrero, took part today in the Budgetary Outlook Conference organised by Funcas, where she warned of the gradual weakening of the national fiscal framework. She pointed in particular to the repeated rollover of budgets and the absence of draft General State Budgets. This practice, which can no longer be regarded as exceptional, undermines accountability, parliamentary oversight and medium-term economic planning.
In her remarks, Cristina Herrero stressed that both the submission of budgets and multi-year planning are essential tools for anchoring the expectations of economic agents, reducing uncertainty and supporting investment decisions with a medium- and long-term horizon. In her view, the absence of budgetary debate makes it difficult to identify economic policy priorities and subsequently forces the search for piecemeal agreements. She also warned that this declining awareness of the institutional importance of the budget is beginning to extend to the European level.
She also referred to the role played by AIReF in providing independent data and analysis that help reduce uncertainty and prevent public-sector action from becoming an additional source of instability. She pointed in particular to the objective and independent reports that give citizens the information needed to form their own views, as well as to the recommendations that require governments to publicly explain their decisions and any departures from the fiscal rules.
AIReF forecasts
Cristina Herrero reviewed AIReF’s forecasts, which point to Spanish economic growth outpacing that of the euro area in the short term, with GDP growth of 3.0% in 2025 and 2.1% in 2026. Private consumption is expected to remain the main driver of activity, supported by strong employment, while the external sector is projected to make a slightly negative contribution amid a more subdued international environment. Over the longer term, AIReF projects real economic growth converging towards 1.3%.
On the fiscal side, AIReF expects the general government deficit to remain below 3% of GDP through to 2030, with an improvement in 2025 and 2026 linked to the withdrawal of temporary measures and the strength of economic activity. Over the medium term, the deficit is projected to widen again, driven by higher spending on interest payments, defence investment and pensions. Public debt is expected to decline over the medium term, supported by a favourable differential between growth and interest rates. However, long-term projections point to upward pressures stemming from population ageing.
Reforming the national fiscal framework
In closing, Cristina Herrero noted that this institutional weakening comes at a particularly critical time, coinciding with the entry into force of the new European fiscal framework, which places medium-term planning and sustainability at its core. Fiscal planning is now structured around Medium-Term Fiscal and Structural Plans (MTPs), with binding commitments for four years based on a new key operational variable: net primary expenditure excluding revenue measures. AIReF expects breaches of the European rule at the end of the period, and as early as 2026 under the annual reference.
AIReF identifies significant inconsistencies between the new European framework and the national fiscal framework, which also suffers from structural weaknesses. These include the coexistence of multiple fiscal rules, shortcomings in enforceability, and the limited integration of the decentralised structure of Spain’s public sector. These shortcomings hinder the effective and consistent application of the new rules and add to institutional uncertainty. Given the importance of a comprehensive fiscal framework in supporting sustainability, AIReF considers a far-reaching reform of the national framework to be necessary, as set out in the opinion it published last November.
